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From |
Nahla Betelmal <nahlaib@gmail.com> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: interpretation for negative and positive slope combination of interaction term |

Date |
Thu, 9 May 2013 21:06:49 +0100 |

Sorry tyaqub2003, I cant see the content of your email. Can you resend it again please. thank you nahla On 9 May 2013 20:51, <tyaqub2003@yahoo.com> wrote: > Sent from my BlackBerry® smartphone provided by Airtel Nigeria. > > -----Original Message----- > From: Nahla Betelmal <nahlaib@gmail.com> > Sender: owner-statalist@hsphsun2.harvard.edu > Date: Thu, 9 May 2013 20:51:21 > To: <statalist@hsphsun2.harvard.edu> > Reply-To: statalist@hsphsun2.harvard.edu > Subject: Re: st: interpretation for negative and positive slope combination of > interaction term > > Thanks for the reply David, but I think there is something not quite > right. If you check this file, p.133 figure 7.8 > > http://www.sagepub.com/upm-data/21120_Chapter_7.pdf > > You will notice that in order to get the slope for the group with > Dummy= 1 (overconfident manager in my case), we should add the > coefficient of beta and gama ( MV and OC*MV in my case) , and to get > the intercept for those managers we should add the alpha and y ( my > model intercept and the coefficient of OC ) > > I found the same in other files, the problem is that all the examples > they provide both beta and gama are positive which makes the addition > and interpretation process easy. > > my question is how to add and interpret when one is positive and the > other is negative . As the effect of MV on realistic managers is - > 0.0566 and on overconfident managers is + 0.0596 , it moves from > negative to positive 0.003 (again the interaction is significant > although at 10 level). how many times MV effect overconfident managers > more than other managers ? > > I would really appreciate help in that > > Many thanks > > Nahla > > On 9 May 2013 19:36, David Crow <david.crow@cide.edu> wrote: >> Dear Nahla- >> >> You're on the right track, but not quite right. I find that it's >> helpful to think of the meaning of each coefficient. Let's boil your >> model down to just the two variables (Market Value, MV, and >> Overconfident Managers, OC), their interaction, and an intercept: >> >> y = B0 + B1*(MV) + B2*(OC) + B3*(MV*OC) + u >> and yhat = B0 + B1*(MV) + B2*(OC) + B3*(MV*OC) >> >> Since OC is an indicator variable (overconfident = 1), when OC=0--that >> is, for non-overconfident, or "realistic" managers", yhat is simply B0 >> + B1*(MV) and the effect of market value is given by B1. However, >> when OC=1--that is, for overconfident managers--yhat is >> B0+B1*MV+B2*OC+B3*MV*OC. Since OC=1, this simplifies to >> B0+B1*MV+B2+B3*MV and the effect of MV is given by B1+B2+B3 >> >> Your calculation (-0.0566241 + 0.0596146= 0.003) leaves out the term >> B2, the coefficient for OC. So, the correct slopes are: >> >> OC=0: -0.0566241 >> OC=1: -0.0566241 + -.1040174 + 0.0596146 = -.1010269. >> >> In this case, the effects of market value appear to attenuate the >> effects of overconfidence. >> >> Hope this helps. >> >> Best, >> David >> >> On Thu, May 9, 2013 at 8:20 AM, Nahla Betelmal <nahlaib@gmail.com> wrote: >>> >>> Dear Statalist, >>> >>> >>> As you can see below, I have a interaction term between OC (dummy =1 >>> for overconfidence) and MV (continuous variable for market value). The >>> interaction term is positive and significant. I want to calculate the >>> slope against MB for overconfident managers which should be the >>> coefficient of MV plus the coefficient of OC*MV. >>> I am confused how to get this figure because MV is negative and OC*MV >>> is positive. So, Should it be -0.0566241 + 0.0596146= 0.003? if this >>> is true how can I interpret how many times the effect of MV is larger >>> for overconfident managers?? 0.003/0.0566. >>> >>> I am really confused and I highly appreciate your help please >>> >>> >>> >>> >>> Linear regression Number of obs = 49 >>> F( 10, 38) = 3.23 >>> Prob > F = 0.0043 >>> R-squared = 0.4385 >>> Root MSE = .08529 >>> >>> ------------------------------------------------------------------------------ >>> | Robust >>> earnings managment| Coef. Std. Err. t P>|t| [95% >>> Conf. Interval] >>> -------------+---------------------------------------------------------------- >>> var1 | .0081153 .0058432 1.39 0.173 -.0037137 .0199443 >>> MV | -.0566241 .0353602 -1.60 0.118 -.128207 .0149588 >>> var3| .1992782 .093338 2.14 0.039 .0103252 .3882312 >>> var4 | -.0040891 .0109331 -0.37 0.710 -.0262219 .0180437 >>> var5 | .0817256 .1169071 0.70 0.489 -.1549405 .3183917 >>> var6 | .0291373 .026944 1.08 0.286 -.0254079 .0836825 >>> var7 | -.0646094 .0320074 -2.02 0.051 -.129405 .0001863 >>> var8 | -.0867868 .0311875 -2.78 0.008 -.1499227 -.0236509 >>> OC| -.1040174 .0556577 -1.87 0.069 -.2166906 .0086558 >>> OC*MV | .0596146 .0324333 1.84 0.074 -.0060433 .1252724 >>> _cons | .1643745 .0994735 1.65 0.107 -.0369991 .365748 >>> >>> >>> many Thanks >>> >>> Nahla Betelmal >>> * >>> * For searches and help try: >>> * http://www.stata.com/help.cgi?search >>> * http://www.stata.com/support/faqs/resources/statalist-faq/ >>> * http://www.ats.ucla.edu/stat/stata/ >> >> >> >> >> -- >> Web site for México, las Américas y el Mundo: >> http://mexicoyelmundo.cide.edu/ >> >> ==================================== >> David Crow >> Profesor-Investigador/Assistant Professor >> División de Estudios Internacionales >> Carretera México-Toluca 3655 >> Col. Lomas de Santa Fe 01210 México, D.F. >> Tel.: 5727-9800, ext. 2152 >> Fax: 5727-9872 >> ==================================== >> >> Conmutador: 5727-98-00 Lada sin costo: 01 800 021 2433 (CIDE) |© >> >> * >> * For searches and help try: >> * http://www.stata.com/help.cgi?search >> * http://www.stata.com/support/faqs/resources/statalist-faq/ >> * http://www.ats.ucla.edu/stat/stata/ > > * > * For searches and help try: > * http://www.stata.com/help.cgi?search > * http://www.stata.com/support/faqs/resources/statalist-faq/ > * http://www.ats.ucla.edu/stat/stata/ > > * > * For searches and help try: > * http://www.stata.com/help.cgi?search > * http://www.stata.com/support/faqs/resources/statalist-faq/ > * http://www.ats.ucla.edu/stat/stata/ * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

**References**:**st: interpretation for negative and positive slope combination of interaction term***From:*Nahla Betelmal <nahlaib@gmail.com>

**Re: st: interpretation for negative and positive slope combination of interaction term***From:*David Crow <david.crow@cide.edu>

**Re: st: interpretation for negative and positive slope combination of interaction term***From:*Nahla Betelmal <nahlaib@gmail.com>

**Re: st: interpretation for negative and positive slope combination of interaction term***From:*tyaqub2003@yahoo.com

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